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15 Food Stocks Hit by Commodity Inflation

General Mills

General Mills (GIS)

Company Profile : Minneapolis-based General Mills is the manufacturer and marketer of branded consumer foods sold through retail stores. It also supplies branded and unbranded food products to the food service and commercial baking industries.

General Mills forecast rising commodity cost inflation when it reported fiscal third-quarter results.

The maker of Cheerios cereals, Nature Valley snack bars, Progresso soups and Totino's pizzas said costs will rise between 4% and 5% this year as prices increase for fuel, dairy, resin-based packaging, cocoa and wheat -- and those prices are expected to rise again in fiscal 2012.

In the first nine months of fiscal 2011 costs rose 1.2% year-over-year to $6.66 billion.

General Mills has had success in the past dealing with higher costs through expense reductions and the introduction of new higher-priced products.

"They have a lot weapons in their arsenal to try to offset that beyond raising prices, but they're not immune," Morningstar analyst Erin Lash told Reuters.

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